Case Analysis-Yahoo! Inc.: Marissa Mayer’s Challenge

Mona Snead

BUS

Instructor: Jackie Brewer

05/31/2015

Introduction

During these fast-paced and troubled economic times and operating a business in the twenty-first century, a business needs to recognize that’s it brand image, corporate culture, and innovation and leadership development policies have a direct effect on profitability and revenue. The corporate strategy of a business in essence can make or break a company. Many companies have stopped any moves towards aggressive growth, are watching costs intensely, and are greatly reducing spending on research and development due to the economic recession. As the global economy starts to improve, businesses are realizing that any lack of innovation is a risk that cannot be afford. Companies can no longer depend on the ideas and practices that have worked for them in the past to guarantee any future success in this global economy. Therefore, businesses are doing everything possible to come up with innovative ways to create new products that their customers want and want to use and also finding ways to improve what they already have. Yahoo!, a popular internet website, is no exception. At one time, Yahoo! was the world's most popular website. Only a few years ago, it was still at the center of the internet world. Yahoo! the enormous web portal was the internet domain many visited for everything from email, finance, fun, news, weather. For several years Yahoo! has seen declining profits and sales, loss of users, and dismal financial quarters as represented by the chart below. (Yahoo Inc. Financial Data)
Financial Information for YAHOO! INC.
Income Statement

2012
2011
2010
Revenue

$4,986.566
$4,984.199
$6,324.651
Gross Profit

$2,480.176
$3,481.549
$3,697.106
Operating Income

$566.368
$800.341
$772.524
Net Income

$3,945.479
$1,048.827
$1,231.663

Yahoo! is hoping that their new CEO, Marissa Mayer can move the company forward. Marissa Mayer was appointed the new chief executive officer (CEO) of Yahoo! in July 2012 and faces many challenges in creating a new business model for Yahoo! and reviving it old image.
This analysis will examine the challenges faced by Marissa Mayer, CEO and President of Yahoo!, a new vision, establishing Yahoo’s identity as a company, and moving to a mobile platform.

Yahoo! The Company

Founded in 1994 by David Filo and Jerry Yang, Yahoo began as a way to pass time by categorizing internet lists into subcategories and this grow into a global brand that has changed the way users correspond with each other, find and access information and buy things. With capital backing from venture capitalists Yahoo! was able to launch a successful IPO in April 1996 with 49 employees and as the first navigational guide to the web. (Yahoo!, 2012) Today, Yahoo! is a leading global internet company that offers a comprehensive branded network of services, including Yahoo! Mail, Yahoo! Messenger, Yahoo! Groups, Yahoo! Answers, and Flicker worldwide. Yahoo! generates revenue from ad displays, searches and fees from these offerings. Currently Yahoo! competes with Facebook, Google and Microsoft for online display advertising.
New Vision and Leadership for Yahoo!

In 2011, Yahoo! Employee Satisfaction Survey (YESS) provided a clear picture on how Yahoo! employees viewed the corporate culture. Overall, Yahoo! employees did not have confidence that management was capable of leading the company. As a result, 19% of the employees surveyed indicated that they would look for better opportunities elsewhere.
In

particular, 21% of Yahoo!’s product division, where the majority of Yahoo!’s key talent resides, surveyed that they did not want to continue working with the company (Swisher, 2011). Much of the employee dissatisfaction came as a result of the firing of CEO Carol Bartz. Soon after Bartz departure, the leadership at Yahoo! was much like a revolving door, with more than